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UK house buyer demand weakened in March, according to a survey of property professionals, who turned more cautious in their market outlook amid economic uncertainty.
The Royal Institution of Chartered Surveyors (RICS) survey's gauge of the level of new buyer enquiries fell deeper into negative territory in March, scoring a net balance of -32% down from -16% in the previous month. This result marked the weakest demand sentiment since September 2023.
Meanwhile, the survey's indicator around the level of agreed sales also further deteriorated, to a net balance of -16% in March from -13% in the previous survey.
The UK residential property survey's measure of three-month sales expectations also pointed to a further dip in activity over the near term.
The survey's measure of sentiment on house prices fell to a net balance of +2%, down from readings of +11% in February and +20% in January. RICS said that this feedback was consistent with price growth largely flattening out over the past few months, which was mirrored across most of the UK, though Scotland and Northern Ireland appeared more resilient to downward pricing pressures.
In the rental market, a net balance of +20% of survey respondents reported a rise in tenant demand, though property professionals said they continued to see declines in landlord instructions, which refers to new supply. With letting demand increasing and supply shrinking, a net balance of +31% respondents expected rental prices to rise over the coming three months.
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RICS warned that the impact of US president Donald Trump's newly-imposed global tariffs and potential responses with retaliatory levies by other countries may stimulate further uncertainty going forward.
Simon Rubinsohn, chief economist at RICS, said that the end of the stamp duty break, at the end of March, "was always going to lead to a pause in activity in the sales market".
From 1 April, the threshold at which most first-time buyers start paying stamp duty reverted back to £300,000 from £425,000, while for other homebuyers it fell to £125,000 from £250,000.
Rubinsohn added: "However, the latest results, and indeed the anecdotal remarks from respondents to the survey, suggest that the shift in sentiment has been aggravated by the slew of negative macro newsflow over the past few weeks."
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“Looking forward, the impact on the market will in no small part depend on how the economy is affected by the emerging trade war and the response of the Bank of England to the shifting environment. For now, it is noteworthy that the longer-term RICS expectations metrics are still relatively resilient, but they have the potential to be blown off course if the tariff headwinds intensify."